Bridging lending approaches £2.5bn mark

UK bridging lending has achieved a 25 per cent year on year growth, with the market now resting at just under £2.5 billion.

According to the West One Bridging Index, the bridging sector is almost a quarter larger than it was in November 2013.

The pace of growth seems to have steadied in comparison to 2012’s checkpoint of 73 per cent year on year growth, which the index accounts to the market entering a ‘ more mature phases of improvement’.

Even though the volume of loans saw a 19.3 per cent increase in the year to November the average bridging loan size has dipped slightly from summer’s £581,000.

Just under 50 per cent loan to value is stated to be the market’s average ratio and average interest rates to November 2014 experienced a drop of 0.06 per cent to 1.16 per cent.

Duncan Kreeger, Director of West One Loans, says: “The rapid rate of growth enjoyed by the bridging loan market has long outstripped that seen in other sectors and it was to be expected that the pace of this would level off at some point.

“We have now entered a more stable phase of development, but annual growth of more than 25 per cent is still some going and proves that the market still has plenty of capacity for further improvement.

“As perception of the bridging industry continues to improve and awareness of the usefulness of the products spreads, then there is no reason why the sector can’t build on its previous successes and carrying on growing into 2015. We’ve seen high street banks regain some of their appetite to lend in 2014, but there still seems a certain reluctance to get things moving on the development front and bridging can help plug the gap as it has so effectively in the past.”